What’s a Good RV Loan Rate?

You may have heard the saying, “cash is king.” However, getting an RV loan is the reality in most cases, especially when purchasing a new RV.

Paying cash for an RV just isn’t always possible. So, how do you know if you’re getting a fair deal on your RV loan? Could you be getting better terms and conditions?

Today, we’ll look at RV loans and help you decipher if you’re getting a good deal or should be looking elsewhere. 

Let’s dig in!

What Is an RV Loan?

An RV loan is a personal or secured vehicle loan granted to those looking to finance an RV.

These loans make paying for and attaining an RV possible for more buyers.

The RV loans are typically harder to acquire as many banks and loan providers see RVs as luxury items. However, dealerships are often quick to offer financing.

How Do RV Loans Work?

You can get an RV loan through a variety of sources. One option many people choose is to work directly with the dealership to secure the appropriate loan. This seems to be the easy route as the dealer becomes a bit of a one-stop-shop similar to a car dealership.

You’ll be able to choose your RV and sign for the loan all in one place. 

Another option is to arrive at the dealership having already secured an outside lender. This is often done through your personal bank where you already have established a credit relationship or through an online financing company.

Going this route can be a great way to know your loan terms before walking through the dealership’s doors. 

What’s a Good RV Loan Rate?

RV loan rates vary based on several factors, so a good rate for one person may not be a good rate for another.

In general, RV loan rates range from 4%-20%. Ideally, a purchaser will aim for an RV loan with a 10% or lower interest rate. The interest rate will depend on your credit score, down payment, and loan terms. 

As you see, the average rate can be quite high.

Pro Tip: While RV loans can be helpful for those who need assistance financing their RV, they are not for everyone. These are 5 Reasons to Avoid RV Loans.

Typical RV Loan Terms

RV loan terms are a bit of a mix of what you’d expect from an auto loan and a mortgage. Generally, the purchaser can expect loan payback terms to be between five and 20 years.

Of course, it’s possible to have a shorter term, but 20 years seems to be the longest possible length.

To get a longer-term loan, such as 15 to 20 years, lenders will often require the loan amount to be over $50,000. 

How to Get the Best RV Loan Rates

No one likes dealing with high-interest loans. Every percentage higher you accept for a loan is more you’ll pay in the end. You can easily end up paying more than double the initial price if you’ve accepted a high-interest loan.

Let’s look at a few ways you can secure an acceptable loan offer. 

Establish Good Credit and Payment History

Scoring a great loan often begins far in advance. Coming into the dealership, you’ll want to have a great payment history already and good credit. You can achieve this by always paying your bills on time every month.

Having good credit also means you have a track record of paying off your loans.  

Keep Your Credit Score Up

The higher your credit score, the better. Your credit score is a big picture of how you handle your finances regarding credit. This gives lenders a snapshot of what they can expect from you as a borrower.

Purchasers with a high credit score have proven that they are low risk to the lender.

If your credit score is low, you may need to spend some time raising it before applying for an RV loan. 

Keep Your Debt to Income Ratio Low

Be realistic about what you can afford. Lenders want to know that you can afford your RV payment without it being a hardship on you. They know that if your RV payment is too much of your income, there’s a risk you’ll be unable to pay.

Remember that creditors want to see that you’ll still be able to pay any other debts you have (such as cars, mortgages, and other loans) in addition to any necessities. 

Pro Tip: Before you sign off on an RV loan, make sure your monthly payment amount is not too high! We uncovered How Much Your RV Monthly Payment Should Be.

Offer a Down Payment

Offering a downpayment shows that you’re financially secure enough to have planned for the purchase.

Lenders like to know that you’ve thought the purchase through and are invested in it.

Additionally, having a down payment reduces the amount you’ll need to take on in a loan, making your monthly payments lower and resulting in a shorter payoff time frame. 

Compare Multiple Lender’s Rates and Terms

Don’t just assume you have to accept any loan they offer you. If you feel the loan terms are subpar, you can walk away from the deal. You also don’t have to go with an RV dealer’s loan partner.

You can come to a dealership with your own loan from your personal bank or another source.

Shop around a bit to make sure you’re getting fair terms for your situation. And, when loan shopping, don’t let too many lenders do hard credit checks on your behalf. This can reduce your credit score and ultimately hinder your loan search.

Just because you don’t have the cash up front to buy your RV outright doesn’t mean you must accept horrible terms. Doing a bit of loan research as a part of your RV research can leave you with much better terms than if you just go in blindly and are willing to accept whatever loan terms they throw your way.

Are you happy with your RV loan terms?

Would you have done anything differently if you could?

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